Financial Management
About Financial management in the medical field, especially in the Biomedical/Clinical Engineering department utilizes different managerial finance techniques and/or budget strategies to include funding sources, budgets, cost of services, staffing and contract services costs, parts and supplies, as well as efficiency (work/cost), etc. Budget Models There are two models used for funding budget operations within the medical treatment facility to include Charge-back budgeting and Centralized budgeting. Charge-Back A charge back technique is the allocation of costs and resource usage based on actual usage or a predetermined amount. This is also called "charge out" due to assigning of a cost center costs to the associated profit centers, such as biomedical department costs to the laboratory department for using their services. The cost center (i.e. a laboratory department) budgets and orders its own parts and supplies while biomedical engineering department performs the required labor. The concepts are: * customer has oversight and tracking of maintenance spending to include service contracts, parts, and supplies. * departments make every purchase decision to include service contracts, parts, and supplies costs regardless of lack of knowledge from vendors. * administrative overhead (ongoing expense of operating their own department resources) is timely and very costly. * difficult to justify erroneous costs to stakeholders. Centralized A centralized technique is the controlling element of allocation of costs and resource usage based on actual usage or a predetermined amount. The concentration and decision making of assigning of a cost center costs to the associated profit centers, such as biomedical department costs to the laboratory department for using their services is managed exclusively by the biomedical department. The biomedical cost center budgets and orders its own parts and supplies for the other departments (i.e. a laboratory, radiology, audiology, ) in order to perform the required labor. The concepts are: * easier for biomedical department to maintain and budget for entire annual maintenance funding * perfect for long-term planning and documentation to include service contracts, parts, and supplies * best organisational safeguard against fraud, waste, and abuse from outside vendors. * Biomeds are best qualified to negotiate and strategically plan how organizational dollars are best spent on medical devices and maintenance services. * requires cooperation and teamwork of department team leaders. *enables savings through reduced parts and supplies consumption as well as storage costs. Expense Models There are two models used for expenses within the medical treatment facility to include Operating and Capital Investment. Operating Overhead costs for a business are the cost of resources used by an organization just to maintain its existence. Operating costs are incurred by all equipment — unless the equipment has no cost to operate, requires no personnel or space and never wears out. In some cases, equipment may appear to have low or no operating cost because either the cost is not recognized or is being absorbed in whole or part by the cost of something else. Operating expense costs may include: *Salaries or Wages of personnel (e.g. overtime pay, benefits, health insurance, retirement, sick pay, unemployment, etc). *Office space rent *Fuel costs *Parts replacement and supplies *Contractor services *Calibration Services *Training *Travel Capital Capital costs are costs incurred on the purchase of land, buildings, construction and equipment to be used in the production of goods or the rendering of services, in other words, the total cost needed to bring a project to a commercially operable status. *Office furniture *Test equipment *Tools *Software *Hardware *Reference materials (i.e. magazine publications, books, NFPA 99, etc) For example, the purchase of a new machine that will increase production and last for years is a capital cost. Capital costs do not include labor costs except for the labor used for construction. Unlike operating costs, capital costs are one-time expenses. TO BE CONTINUED!!!!!!!!!!!!!!!!!! References Links See also Category:Medical Equipment Management